Imperial Capital downgrades United; says it might take 4 years to catch rivals Delta, American

An airline analyst downgraded United Continental on Thursday, saying it has not capitalized on lessons learned from other mergers in the industry and that it still lags its industry rivals.

Imperial Capital analyst Bob McAdoo said that the company's plans indicate that it could take four years to close the gap on margins and returns being seen at Delta and American.

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Imperial Capital cut the United parent to "In-Line" or neutral from "Outperform," and lowered its target price for the shares within one year to $47 from $55.

McAdoo said United's pre-tax earnings lagged both Delta Air Lines Inc. and American Airlines Group Inc. by about $1 billion each, and he expects United to continue to trail those carriers.

United "has yet to adopt key steps taken in recent successful airline mergers and we are unsure why McAdoo wrote.

United did not immediately comment on Imperial's downgrade.

The second-biggest airline company by traffic, behind American, it is struggling to make the 2010 merger of United and Continental profitable. While American and Delta posted first-quarter profits, Chicago's United reported a loss of $609 million.